What goes up apparently must come down, though, and anchoring this balloon is none other than Federal Reserve Chairman Ben Bernanke.

The general rule of thumb for IPOs is this: Deals are highly sensitive to market volatility. This primarily is because they’re often high-risk assets — that is, companies in the early stages of their life cycle. Thus, when investors get skittish, the crowd around the IPO pool can get awfully sparse, awfully quick.

Really coming under pressure have been companies tied to interest rates, especially real estate investment trusts, or REITs. Just take a look at this chart:

Company

Ticker

Deal Date

Return

Aviv REIT

AVIV

3/20/13

+25%

CyrusOne

CONE

1/17/13

+2%

Armada Hoffler

AHH

5/7/13

-2%

Hannon Armstrong Sustainable
Infrastructure Capital

HASI

4/17/13

-6%

ZAIS Financial

ZFC

2/7/13

-14%

Ellington Residential

EARN

5/1/13

-16%

American Residential

ARPI

5/8/13

-16%

Orchid Island Capital

ORC

2/13/13

-21%

And at least so far, we haven’t seen a REIT deal go live since Bernanke hinted at Fed tapering.

Other recent deals have shown weakness that frankly seems counterintuitive. Specifically, Coty (COTY) and Gogo (GOGO) both looked like potentially popular offerings, but have been weak in the early offing. It’s not a stretch to think that even a month ago, their fates might have been much different.

It’s a good bet that the IPO market will be fairly muted for the rest of summer, especially considering there’s usually not much activity in August and September, anyway. Expect a return to more lively activity in the fall.

The good news is that should leave enough time for the markets to get adjusted to higher interest rates.

Based in Silicon Valley, Tom Taulli is in the heart of IPO land. On a regular basis, he talks with many of the top tech CEOs and founders trying to find the next hot deals and finding out which start-ups are stinkers.

A long-time follower of the IPO scene, back in 1999 Tom started one of the first sites in the space called WebIPO. It was a place where investors got research as well as access to deals for the dot-com boom. Tom also wrote the top-selling book, Investing in IPOs. In it, he covers all the aspects of analyzing an IPO, such as reading the prospectus, detecting the risk factors and understanding some of the arcane regulations. But don’t worry — if that process is too intimidating for you, thankfully Tom will do the legwork for you right here in the IPO Playbook blog.

Tom is routinely quoted in the media about upcoming deals with his interviews on CNBC and Bloomberg TV, but he is eager to take your questions too. You can message him on Twitter at @ttaulli. And feel free to weigh in via the comments section on any of his IPO Playbook posts.